You really need to educate yourself on how petroleum products are actually priced, traded, sold, and delivered. Like you, I used to see the quoted bbl price of Brent and Texas crude as pretty accurate estimates of the actual cost of a delivered barrel of oil, and as a proxy for final refined fuel prices. That's because, in normal market conditions, that's generally been true. In these last few weeks I've kinda had a crash course in energy market economics, which has been pretty eye-opening for me.

The current disruption in the Strait has completely changed the equation and made the quoted barrel prices much less relevant. This isn't politics; it's just economic and mathematical reality. The implications of the strait remaining closed for any significant period of time, both for the global economy and especially our industry, are pretty dire.

 

control

1 of 2

verb

con·​trol kən-ˈtrōl
controlled; controlling
Synonyms of control
transitive verb
1
a
: to exercise restraining or directing influence over : REGULATE
control one's anger


So how many IRANIAN tankers have successfully transited the strait since we established the blockade? Denial is ALSO control.

 

The article Fangs quoted made the assertion that we 'control " the Strait, and that non -Iranian ships simply need to coordinate with the USN for transit.

However, very few if any have done so, as you well know, because the risk of attack from Iran's mosquito fleet is too high. End result: oil, LNG, and everything else is not flowing through the Strait. And if I had to bet on which side will blink first in this standoff, it's not going to be the IRGC, as much as I'd wish it otherwise.

 

Right. Let bombs do the talking…

 

Right...and I mean ....and just as critics were calling the US War illegal........the closing of the straight of Hormuz (or through terrorism by threatening ships transiting it) is certainly illegal under The UN Convention of the law of the sea (articles 38 and 44 respectively)

You bet this asymmetric warfare which is correctly labelled economic terrorism........is still going to happen...there are still going to do it.....and a a result will remain in power.......so they kind of won the war. It ****es me off but I don't really see how we can spin it another way.

 

soooooo both sides have control i guess. Or put another way……neither does

 

Yup. I agree with all of this. The IRGC has suddenly discovered that they can exert incredible power over the global economy with a few mines, fast boats, and drones. It's indeed economic terrorism. There are only, really, 2 ways that the US could win this conflict: 1) Full-scale invasion (not gonna happen) or 2) inflict so much economic pain on Iran via the blockade that the IRGC calls it quits. Except that's not going to happen, either.

Meanwhile Russia is delightedly raking in 2X the monthly oil revenue they had before the conflict. China has banned all oil exports, greatly reducing their reliance on the Gulf. The IRGC won't fold unless the entire country collapses info civil war, which if you know anything about Iran, is a long, long way away from today.

All of this was foreseeable and avoidable. All of it.

 

“Controlling” the strait means we decide who can go in and who can go out. We can definitely stop any ship from going in and out but we also definitely cannot guarantee the safety of ships that we want to go in and out. Therein lies the rub.

 

Thanks for a measured reply.

I still think that squeezing China means squeezing the American public past the point that they are willing to tolerate. I hear a lot of talk about playing the long game vis a vis Iran, China, and Russia, but the long game has always been, and will continue to be a weak point for our country. That’s not going to change no matter how much we wish the reality were different. I would also argue that the US and Chinese economies are still intertwined enough that putting economic pressure (goes hand in hand with energy pressure obviously) on China has significant negative follow on effects in the US economy. Again, we may wish it weren’t so, but that’s the reality and will continue to be for at least some time. Finally, the last time we squeezed the energy supply of an Asian adversary, we wound up being pulled into a world war. Not saying that’s likely this time around, but it’s worth noting that we don’t make these decisions in a vacuum and other cultures tend to respond in ways that are hard for us to predict.

Again, thanks for the respectful discussion.

 

short answer, yes.

Leaders behind moves in each of these hot conflicts have one attribute in common. It’s no coincidence either. Values and demands have shifted. A lot. Crime & punishment, trailing just behind. Instead of bs in Islamabad, what’s wrong with Baghdad? Didn’t we pay for that too?